Sanzar split on S14 expansion

Top level sources are tipping an "explosive" meeting in Dubai on Wednesday as southern hemisphere rugby tries to sort out an ugly impasse that threatens the future of the game in this part of the world. With the clock counting down on the Sanzar (South Africa, New Zealand, Australia) coalition ahead of negotiations to renew its broadcasting deal, the three sides remain divided on the future of the game.

Australia and New Zealand are in expansion mode and want to explore new frontiers in Asia.

That puts them in direct conflict with South Africa's desire to have Argentina included in future plans.

To add to the sense of disarray, all three unions now appear keen to loosen Rupert Murdoch's grip on the game and to negotiate directly with the respective pay TV platforms in their own countries.

Murdoch's News Ltd first bought the rights to southern hemisphere rugby in 1995, which ushered the game into the professional era, and News makes a margin by on-selling those rights to Sky TV and Foxtel in Australia.

New Zealand Rugby Union chief executive Steve Tew did nothing yesterday to dampen speculation that News Ltd would be cut out of the equation.

"It would make sense to cut out the middleman," he said.

"We're comfortable either way, but there are distinct advantages to having a one-stop shop."

Tew agreed the March 4 meeting in Dubai could be a watershed moment in the game.

"It has the potential to be," he said. "It's make-or-break time and we are pretty conscious that the June deadline [for the broadcasting deal] is looking tight and we're hopeful South Africa and Australia will come with a willingness to reach some middle ground. If we can't, clearly we will have to meet again."

Until recently South Africa has been a comparatively benign partner in the Sanzar alliance, even though it generates the lion's share of Sanzar's revenue.

Recently that has changed, with the republic flexing its muscle behind closed doors and making noises about switching to competition with the northern hemisphere.

Australia's controversial rugby boss John O'Neill's aggressive and public utterances about what is good and not good for Sanzar have also strained relations.

Tew said: "We are not that divided. We are no further apart than we were the last time we negotiated to renew this deal and that concluded in a nice time frame.

"There is still plenty to decide and it may be we end up with four different options before we determine what is best and put them into the market to see how they are valued.

"Ultimately the money on offer for any of the options we are considering will determine the viability and sustainability of the game."

Rugby's timing, despite the bleak economic outlook, is good. The TV rights market is proving resilient. The game is buoyant in South Africa. In New Zealand, passion for the game is high, but that's not translating into bums on seats and ratings.

If further evidence of that was needed, the Star-Times understands the combined number of Super 14 season ticket holders has fallen dramatically from 28,000 in 2007 to 17,000 this year.

Tew said it was critical in the coming months "that good rugby is played. Whether we like it or not we are in the entertainment market. That is our business.

"I sat and enjoyed watching the Crusaders-Hurricanes game last night, but it's fair to say, even with the interest I have in the game, the first half of the Hurricanes-Highlanders match last week was a little harder to enjoy.

"We have got to get the product right. The game has to be good. Then we have to make sure we are presenting it in a way the fans find attractive, and it's priced competitively. [On Friday night] you could have watched cricket, rugby or basketball, all involving New Zealand teams, and any other manner of things, on TV. We have to be mindful of that. Our market research is showing there is still very strong interest in rugby. We just have to turn that interest into purchase."[/b]

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It seems as though expansion is going to go ahead but whether or not it'll be Argentina or Japan who gain the franchise remains to be seen. Good to hear Rupert Murdoch won't be getting a slice of the pie this time.